Seems like a sah-wheat deal for Californians.
Monumental deal for PG&E land
140,000 acres of utility's upper watershed to be protected for wildlife, outdoor enthusiasts
Paul McHugh, Chronicle Outdoors Writer
Friday, April 2, 2004
Pacific Gas and Electric Co.'s bankruptcy reorganization has resulted in a windfall for California's environment: A vast acreage of pristine mountain land owned by the utility will be permanently protected, and a $100 million fund will be created to maintain it and open it to recreational use.
From Mount Shasta to the Carrizo Plain, nearly 1,000 parcels totaling 140, 000 acres -- almost twice the size of the Golden Gate National Recreation Area -- will be donated to parks and wildlife agencies or protected through conservation easements.
The land includes important wildlife habitat and many sources of the state's drinking water, as well as some of the best fly-fishing streams in the western United States. There are fragrant conifer forests, rich stands of hardwoods and rolling oak savannahs, pierced by glittering rivers.
Under a deal reached with the California Public Utilities Commission, some lands will be protected as wildlife preserves, while others will be opened up to new trails, boat ramps and campgrounds.
Environmentalists, sportsmen and outdoor enthusiasts are hailing the agreement as one of California's most important conservation deals in decades.
"It's one of the top transactions for preserving valuable habitat in this state in the last century," said John McCaull, who was the state legislative director for the National Audubon Society when the issue was under debate. "You'd have to look at creation of the national parks here to find anything comparable."
Although PG&E's court-approved bankruptcy reorganization was announced in December, the PUC is just now describing details of the landmark conservation agreement.
Under the settlement, PG&E will transfer its upper watershed lands to a public trust. A newly created, 17-member committee, the Pacific Forest and Watershed Stewardship Council, will devise management plans for individual parcels and submit them to the utilities commission for final approval.
The deal also establishes a $100 million fund paid by PG&E ratepayers to manage the land for 10 years: $20 million for planning; $50 million for rehabilitation and improvements such as trails, river corridor restoration and re-forestation; and $30 million for urban youth outdoor programs.
"These lands will now be preserved in perpetuity in the public interest, instead of being broken up and the ownership scattered. That's a dream come true,'' said William Ahern, the utilities commission's executive director.
The land, some of which the utility acquired in the Gold Rush era, is connected with PG&E hydropower operations. It is distributed among 981 parcels, primarily along river corridors in 21 counties. Much of it is along the Pit, Feather, Yuba and American rivers. It also includes 655 acres of the Carrizo Plain in San Luis Obispo County.
The lands hold substantial stands of mature Douglas fir, lodgepole pine, cedar and other trees. They also include blue-ribbon fly-fishing streams, such as Hat Creek between Mounts Shasta and Lassen, where anglers stalk native rainbow trout up to 2 feet long.
About 95,000 acres adjacent to hydropower operations can be protected only through conservation easements. Of the remaining 45,000 acres, some may be involved in land swaps, some may be targeted for recreational use, and some may be logged selectively in demonstration projects.
"This will be the biggest, most comprehensive planning process for hydropower lands anywhere in America,'' said Charlton Bonham, an attorney for Trout Unlimited and the California Hydropower Reform Coalition, who helped carry a torch for the environmental community during the legal proceedings.
Other conservation groups that were closely involved in the process were the Natural Heritage Institute and the Trust for Public Land, both in San Francisco. The state Resources Agency and the attorney general's office spearheaded the proceedings.
A spokesman for PG&E said the company is pleased with the outcome. The utility will benefit by keeping the hydropower plants while seeing the lands move to a new form of protective management.
"We're extremely excited -- this is a landmark event," said Randy Livingston, the utility's director of power generation, who will serve on the new council. "Folks have always appreciated the level of stewardship we've applied to those watershed lands. Now we can keep something like that in place. "
PG&E was born in the Gold Rush, installing power-generating turbines on mining flumes. Gradually purchasing the assets and acreage of other small generating firms, the utility built itself into Northern California's major power source as well as one of the state's top 10 landowners.
PG&E was a regulated monopoly until the administration of Gov. Pete Wilson and the state Legislature started deregulation. The utility lobbied for the change, arguing that competition would make rates plummet.
Instead, deregulation left the company unprotected from soaring energy costs in 2000. Hobbled by a rate freeze, the utility became saddled with $9 billion in debt it looked like it could never recover from. In April 2001, it became the largest utility ever to go bankrupt.
Part of deregulation required divestment. PG&E sold off most of its non- nuclear plants as well as more than 16,000 acres of land.
Even before the bankruptcy, it looked as if the rest of its land would be sold. Conservation groups feared developers would jam the shores of mountain lakes with condos, chainsaws would level forested watersheds, and trout streams such as Hat Creek would turn into exclusive enclaves for the wealthy.
PG&E spokesman John Tremayne said the 1996 deregulation demanded that market value of assets be established. "We thought we could do that with the hydropower lands by having them appraised. We wanted to keep possession. But we got turned down. The next step was, we had to put them up for auction."
As the utility tried to divide assets, regulators and public interest groups accused it of trying to skirt adherence with at least 15 state laws. Loretta Lynch, then president of the utilities commission, characterized it as a regulatory jailbreak.
The climax came in 2002. U.S. Bankruptcy Judge Dennis Montali ruled that federal bankruptcy law did not override state laws, a decision that was ultimately upheld. Montali ordered the lead parties into negotiations.
They emerged with a new settlement that included the lands deal. The utilities commission approved the settlement in December by a 3-2 vote. Lynch and Carl Wood voted against, saying the fiscal health of ratepayers and future oversight by the commission were impaired.
However, the portion affecting watershed lands was hailed. "There's a process to guide us," said Ahern, the utilities commission's executive director. "Now, we just need to follow through. Dissension can be resolved through discussion. Having money for the process definitely helps."
The stewardship council will be composed of 17 members, from state and federal agencies, water districts, the forest and farm industries, and conservation groups. Its first meeting will occur this month, but a location and date have not been set.
Key facts about the land to be preserved under an agreement between PG&E and the statePublic Utilities Commission:
Parcels: 981 in 21 California counties.
Administration: A 17-member stewardship council will make recommendations to the PUCon how to manage the parcels. State and federal agencies, conservation groups, the farmand forest industries and water districts will be represented on the council.
Cost: PG&E ratepayers will contribute $100 million for management costs for 10years.
E-mail Paul McHugh at firstname.lastname@example.org.
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